Crypto 2020 Outlook - Bitcoin Suisse

INTERVIEWpleasant thought. As such, a myriad of new peer-to-peer marketswill emerge. And a peer can be justabout anything – a human, a machine, a building, anything. But inorder to function properly, thesemarkets need price-discovery mechanisms and an adequate means ofpayments. This is where Bitcoin,or some other technical variationthereof, comes into play.Niklas: Throughout 2019, we haveseen major crypto assets reel fromthe 2018 correction and try to findtheir true market value. Bitcoinstarted the year near 4’000 dollars,went as high as 13’000 dollars, andsettled end-of-year at around 8’000dollars. Ethereum has been underpressure all year, due to the uncertainties related to the launch ofETH2. The aftershock of the ICOboom and the 2018 correction have,in my view, been the major drivers of the market throughout 2019,much larger than the impacts provided from the regulatory- and industry side, and the trend has beentowards stabilization.It would appear that the largecorrection is over – and possiblywe’ll be seeing a ‘crypto spring’replace the crypto winter, as themonths of 2020 turn warm.There is a growing acceptance of cryptocurrencies asa new asset class. Is it enoughto treat them like any otherinvestable asset? Why orwhy not?Arthur: It will take a while untilcryptocurrencies, or more generally crypto assets, will be broadlyseen as an established, alternativeasset class. For this to happen, wemay have to wait a few years. Butlooking at our most recent partnerships with Amun, Emaar or World-12line, we can clearly see where thejourney is heading. And as such, Istrongly suggest to consider cryptoassets as a potential investable assetclass and to maybe even enrich yourtotal wealth with a suitable portionof crypto assets and hodl them. Justa thought, of course Quite honestly, crypto technology is constantly changingand evolving. What technicaldevelopments can we expectto have strong impact in2020?Niklas: Crypto technology – as wellas those of the surrounding ecosystem, are still very much in their infancy. However, development is ongoing, not just on the technologyside, but also in regards to the regulatory frameworks and the ecosystem in general.Amongst things to watch outfor in 2020 are, in no particular order: The launch of ETH2, the migration of the ETH-based ecosystem toETH2 as well as the developmentof Decentralized Financial Services(DeFi). The launch of the Telegram(TON) network as well as Libra, isalso something to watch out for.Then, of course, the elephant in theroom: The Bitcoin halving. Manythings will happen in 2020 and it isgoing to be a very exciting year.Bitcoin Suisse has applied tobe a licensed crypto bank andsecurities dealer. Everyonewants to know what this willchange for the company?What insights can you give us?Arthur: We have established ourselves over the past six years of operations as a trusted, safe and reliable partner for all our clients. Andwe will further develop our excellent service offering along the pathwe have chosen since 2013. We areconstantly improving and innovating to expand our offering and areregularly entering into strategicpartnerships with renowned globalbrands. But without a doubt, evenmore would be possible under theumbrella of a bank and securitiesdealer license.Niklas: Bitcoin Suisse is an evolving business and we always havebeen. In the summer of 2020, wewill celebrate our seven-year anniversary and you only get to becomethat old in the crypto markets if youcan continuously improve, innovateand re-invent yourself.With regards to the future licenses, less will change than mostwould imagine. We will, of course,offer cash accounts for our clients,in their own name. We will also beable to more cost effectively manage deposits, something which willmake our pricing much more competitive. We will start trading cryptosecurities, stablecoins – and synthetics, such as mini-futures andproducts to short the major cryptoassets. We will be expanding ourcredit/loan and liquidity business,and we will expand our staking offering.Last, but not least – we will belaunching an offering for the public, likely in the form of a SPV, thatthey may invest into Bitcoin Suisse,as to increase our company capital from the current approximately50M CHF, to around 100M CHF,providing for a much stronger balance sheet as we enter the world ofbanking.Over and over again, we haveheard the refrain “the institutionals are coming” – meaningthat larger financial institutions will dive into the cryptoasset market and have a

INTERVIEWNiklas Nikolajsen, Founder of Bitcoin Suisse

INTERVIEW ig nificant influence. Is this asfactor to watch out for in 2020– or should we even care?Arthur: Yes, we care – a lot. The various adjustments on the legal and regulatory side will be the main thingthat enable institutionals to embrace,first opportunistically and then latersystematically, the benefits of thecrypto asset market.And despite the prolonged cryptowinter, we see a crypto summer ofinnovations, be it on the technologyside (think Ethereum 2) or on theregulatory front (think FATF andTravel Rule). And I am proud tosay that we have been very timelyin developing a new service offering for ETH2 staking for all our clients and proposed a comprehensiveopen source solution regarding themissing “Crypto-SWIFT” via theOpenVasp.org initiative. So on several fronts, we see the advancementsthat will bring more and more interest from institutions.Two decades after the newmillennium, we have seenmany monumental changes insociety, business and beyond.What part will crypto play inthe next decade or two?Arthur: The price/performance improvement of technology will continue to accelerate. And the worldis moving towards the better, contrary to what media would have usbelieve. The rapidly growing abundance in major areas of our life (energy, water, food) will allow us tofundamentally re-write the socialcontract between humans and soon,between men and machine as well!But of course, this great journey towards the better will not be withoutsome turbulences in the interim.And as long as humans are cut outof the same mould, it will probablynever be different.14When I was born, three billionpeople lived on this planet. Twobillion were living in so-called extreme poverty. Today, we have overseven billion people and the number of people living in extreme poverty is well under one billion. Andthis trend will not stop. Assumingfurther progress, extreme povertycan soon be put in the museum, asProfessor Yunus (Noble Peace Prizewinner from Bangladesh) phrasedit. Now, couple that with the ever-increasing connectivity of people andyou cannot but assume massive innovation beyond imagination. Butto just wait for the better is not anoption. Because luck meets the prepared. A constant call to action is required. Our clients and partners cancount on us.Niklas: More than most peoplethink. After centuries of a financial and also societal system builton representatives, internal ledgersand central trusted parties – consensus systems, open ledgers and decentralized systems will have a hugeimpact on almost everything.There are many diverseschools of thought on cryptoassets – and a good manymyths. Are there some mainmyths that we should beaware of and which should be“debunked?”Niklas: Yes – crypto assets werenot invented, nor propagated forthe purpose of dark markets andshady business. Quite the opposite,they are here to replace and improveupon the essentially intransparent,inefficient and flawed system ofcentralized trust and centralized ordelegated control – which tends tobenefit the few and not the many.Arthur: A myth? “Bitcoin has no intrinsic value!” To still hear this fromreasonably well-educated peoplesurprises me quite a bit. Yet anothermyth? Satoshi Nakamoto.What has Switzerland doneright so far concerningcryptocurrencies and blockchain technology? Wheredo you feel there is room forimprovement?Arthur: Politics matter. And inSwitzerland we are privileged tohave a rather decentralized, bottom-up political system. And theicing on the cake: our top executivebody, the Federal Council, shineswith a very innovative attitude towards the many possibilities of thisnew technology. This is quite uniquein the world and one of the successfactors of this small country withsuch a global reach in many of themost innovative fields.Niklas: Yes. I have never seen anything, perhaps except the MonaLisa, which could not be improvedupon, and for that reason, I do notfeel that it would be appropriate touse this space to list criticism.When I reviewed various jurisdictions, trying to choose a place formy future Bitcoin company some 9years ago, Switzerland came out ontop. I feel to this day that this was theright decision and I can only praisethe Swiss jurisdiction as a place to dobusiness, in crypto or otherwise.

INTERVIEW“Crypto assets arehere to replace andimprove upon theessentially intrans parent, inefficientand flawed system ofcentralized trustand centralized ordelegated control- which tends tobenefit the few andnot the many.”— Niklas Nikolajsen15

ARTICLEBitcoin in2020Written by Dr. Raffael Huberkco161QuellelBivlaHgnehtdrawRe02

.ARTICLEIn May 2020, the blockreward paid to miners willbe halved from 12.5 BTC to6.25 BTC per block.The block reward reduction has previously led toprice rallies and stronglyimpacts the profitabilityof miners.Bitcoin’s role as a storeof value is becoming increas ingly important. It shows alow correlation to other assetclasses such as equitiesand gold.17

ARTICLELooking Back:Bitcoin in 2019What is Bitcoin?Last year, Bitcoin has made its recovery fromthe “crypto winter” in 2018. Starting the year at 3.7k, Bitcoin has rallied throughout the firsthalf of 2019 to reach almost 14k in late June, and thencorrected to the levels of around 7.6k at the time ofwriting. With a year-to-date return of 105 %, Bitcoin hasbeen the best-performing asset class of 2019. For comparison, the S&P 500 and the tech-focused Nasdaq 100posted returns of 25 % and 33 % year-to-date, respectively. Market accessibility has been further improved,with physical delivery Bitcoin futures launched in lateSeptember.On the technical side, Bitcoin Core developers havecontinued to update their node software, currently sitting at version 0.19.0. This brought about severalimprovements, such as native hardware wallet compatibil

Niklas: Bitcoin, as an asset class as well as a settlement and payment network is, by now, more than 10 years old. It offers a valuable al-ternative to the traditional fiat cur-rencies, both as a means of pay-ment/settlement as well as a store of value. It is the world’s first truly digital money, in the form of data